The National Association of Realtors (NAR) reported that pending sales of existing homes rose +1.2% in November, recovering from the previous month’s -1.3% decline, and were up +7.4% over the last 12 months. High employment and low mortgage rates helped improve demand, but housing supplies have dropped for six straight months and home prices were projected to rise 3.6% in 2020 after a +5% increase in 2019. The NAR’s pending home sales index (compared to a baseline activity value of 100 in 2001) showed the strongest sales in the South at 125.0 (+7.7% Y/Y), followed by the Midwest at 102.5 (+5.0% Y/Y), the West at 98.4 (+14.0% Y/Y), and the Northeast at 96.3 (+2.6% Y/Y).

Although consumers had higher confidence in current conditions, they also felt less confident in future expectations, dropping the Conference Board’s Consumer Confidence Index for December by -0.3 points to 126.5 (compared to a baseline value of 100 in 1985). Confidence in current conditions increased from 166.6 to 170.0, with a drop in consumers’ who claimed business conditions were bad (-2.5% to 11%), and an increase for those who felt jobs were plentiful (+3.0% to 47%), although there was also an increase for those who felt jobs were hard to get (+0.7% to 13.1%). The outlook for the future fell as fewer people expected jobs to increase (-1.2% to 15.3%) and income improvement (-1.8% to 21.1%) while more people expected jobs to decrease (+1.5% to 14.9%) and income to decline (+1.5% to 7.7%).

The Institute for Supply Management’ (ISM) Purchasing Managers’ Index (PMI) for December dropped -0.9% to 47.2%, and its lowest reading since 46.3% in June 2009. PMI values above 42.9 generally indicate expansion, and although PMI has fallen for the last 5 months, the value has indicated expansion for the past 128 consecutive months. Indexes contracted faster for new orders, production, employment, and contracted more slowly for inventories and order backlogs, while supplier deliveries increased at a slower rate and prices began to rise after contracting in November. Respondents commented that new orders fell off, expected export orders did not materialize, inventories have rebounded, and that suppliers were starting to pass on tariff costs.